By James Kwak
The Internet has made possible a golden age of commentary. Anyone with a computer and an Internet connection can create a blog and comment to her heart’s content.
Yet as one of those commenters with a free blog, I am painfully aware that this hypertrophy of analysis has not been matched by corresponding growth in the stuff that we analyze: facts. There is no way we could have written White House Burning, with its one hundred pages of endnotes, without someone else to do the primary research: either the journalistic kind, calling around to sources in Washington to figure out what’s going on, or the data-gathering kind, visiting grocery stores in Brooklyn to track prices and calculate the inflation rate.
So I would just like to second what Menzie Chinn said about the importance of government statistical organizations, which are (along with most of the rest of the government) under attack from Paul Ryan and his troops. Even if you don’t agree with what I say, if you like reading economics blogs, you should realize that they couldn’t really exist without the BEA, BLS, Census Bureau, etc.
Of course, if your economic policy prescriptions are based entirely on pure theory, then I guess you can do without data.
The Baseline Scenario 
Really good point. Thanks for this post.
I would like to see more of a point to your post. Namely a free press is funded by a free people, and free is not gratis. We need an ethic of a people powered press so that reporters can investigate facts and be protected when power would prefer that to be hidden.
The funding model for the press, display advertising was killed by Google/ Amazon by the intentional advertising model. We need an ethic of paying for a free press, more than 60% of the freight. Best is we just do it, but that needs to be mentioned by every blogster. Perhaps we could see that 50% of the ISP bill goes to content, and payments are limited so we have a diversity of voices.
Democracy will fail without this little detail.
Agreed Mr. Kwak, are you referring to the dynamic scoring thing that Simon mentioned in an earlier post? Is this actually close to being real legislation??
A country without data is like a body without an endrocrine system, or without eyes. Republicans are literally bombing us into the stone age without getting noticed, because only geeks care about something as arcane as data. This is a hugely important topic. In the environmental field there is a crisis because the best policy would be based on being able to coordinate environmental data from the local to the global level, but at the national level if all funds dry up for data management, you are left making decisions with only local data and having no picture of your impacts on the regional or global level. It is absurd, and wrong. For us to survive as a species, we have to increase the amount of taxes going to support shared data, not reduce it. If the idea is to make the national government smaller, then we need to make the global government larger. Diverting data funding to global data organizations and standards would go OK with me, but not getting rid of the data altogether. Thanks for bringing this up and pushing my buttons! :)
Right, No private corporation could ever gather date like the government does. Not nearly as efficiently or without any political motive……. oh wait, they actually could and do.
Hey, lets talk about M3, oh, no, it isnt published by the govt anymore because it showed inflation too high….unless you get the number from a PRIVATE source.
Your write-up is misleading.
I don’t understand “tigger nitro”‘s point at all. It doesn’t even seem to be in English. By “date” does he mean “data”? Is “M3” supposed to be “M5”? Surely not — what would the English highway system have to do with this?
… Also, “yourconstitution” has an utterly baffling assertion: that Google/Amazon killed display advertising by the “intentional advertising model”. What in the hell is that? Even Google doesn’t know what it is — it doesn’t return a single hit.
The irony is that these sloppy comments are in response to a fine piece about badly researched writing.
Statistics and data are only as accurate as the integrity of the collector/s. The best example is the rate of unemployment, today’s official 8.1% perceived rate -vs- the real rate which may be in the high teens. All the numbers are simply that, just numbers to number makers, without proven integrity.
And our economic number reporters have very little integrity capital left, and more of them are finding their falsetto voice in the process.
Insightful and hard-hitting. (This isn’t a “troll” post, is it?) :D
Is it not interesting that the “right”, in both Canada and the US are intent on destroying national statistical organizations at a time when their budgetary proposals cannot withstand statistical analysis? Mr. Kwak is absolutely correct that citizens cannot let this occur.
Let’s start with some data on the DERIVATIVES market instead of not accurately counting how many people are dirt poor because of the derivative market…
@Michael Taylor: Unfortunately, the Right — with full connivance from the Left — has long since destroyed the educational system, so that ‘citizens’ mostly have no idea what you’re concerned about. Neither the US or Canada has the tradition of requiring ANY education in even elementary economics ideas. The fact is, you can’t have a democracy without educated citizens. And ignorant citizens see no point in spending tax dollars on education.
I am convinced that the general public is not interested in “facts” anyway. And as for the Menzi Chinn article you referred to, we ought to really take a look at the statistics gathering organizations and see what role they play in what appears to be a market trading on fuzzy economic data.
“if your economic policy prescriptions are based entirely on pure theory, then I guess you can do without data.”
What they call in the trade “going naked”.
What we were told was the information age turned out to be the data age.
What we tell ourselves is the data age is the opinion age with dodgy facts.
What in fact we have created might be called the fake age where there is little or no grounding in fact, nor insufficient view of the horizon beyond our technocratic bunkers. Our economics is playing chess on a board of 49 squares instead of 64. Half the moves do not touch down, and the other half are off the board and don’t count. What we call economics is now nothing more than bankers rationale. Facts are indeed inconvenient.
I love the objective and neutral construction “under attack by Paul Ryan and his troops”. At least James refrained from adding the adjective “shock” before troops. Personally, I believe the Government will always collect “facts”, even while those entities are under “attack” along with “most of the rest of government”. I also believe the private sector, like ADP for example, will continue to offer a variety of services.
But my real point to James is the implied redundancy in his short note. His beliefs appear to be that we should not be “attacking” (which I assume he means “lower the growth rate of”) “most of the rest of government” especially those areas which apparently directly benefit him and indirectly his readers. No need to isolate “facts” as his short blog does. I find it interesting he does not even see the self interest in this. After all, why should a heavily tax subsized multi-billion dollar institution, MIT, (granted, Simon’s employer, not James’.) have to “pay” for information when one of its employees writes “White House Burning”?
I prefer a system which leans toward “those who use, pay”. I am not rigid on this, but when in doubt I prefer those who “attack” government expenditures. The big joke in the sky of course is Ryan’s plan, before the ineveitable negotiations—-assuming it ever even gets to that point—– is still 80% of Obama’s current growth path.
Who pays for facts? Well, that is easy. The American taxpayer does.
Analyst positions are highly graded, and awarded to employees with many years of service and accomplishments.
The idea is to spot trends, and to provide information to senior management that allows for better use of agency resources.
I wasn’t an analyst per se, but the people I knew well working as analysts had their stuff together, and were diligent employees.
It’s a ubiquitous enterprise based on what i saw while employed.
Contrary to perception, the government really does operate largely on facts, and law.
Now, if we could only compel bankers to conform business practices and procedures to the same standards of governance!!
http://www.boston.com/Boston/businessupdates/2012/05/citizens-bank-accused-profiting-from-customers-math-mistakes/ZzKQy82vZx97SHa1JHUyEP/story.html
Talk about IGNORING FACTS!!
Ryan considers all data on swine and hogs collected by USDA and FDA to be an invasion of privacy!
@KFritz – aw, c’mon :-)) – that’s the kind of fact we would like to see accompanied with a link as proof that that is what’s in Ryan’s brain…
@woop – bummer, thought you might have had some derivatives data…
I concur with Burr Stewart and Engineer27.
The society is a complex mechanism ; it requires a control system ; that implies sensors and a compatible controller.
In the broad sense , The Media , Market Researchers (and such) are part of Feedback mechanisms , the functionality of which are delimited by the accuracy of sensed data. Many in business and academia have long relied on provided by government , some of which has been collected by contractors.
@ Annie, I gave THAT post on derivatives data quite a bit of thought earlier today. I thought only of black holes and more quantification with these than “money” possible to resolve the contracts. With all the trillions provided to the TBTF, insolvency still abounds. TBTF = To Big To Exist.
When I grew up, a banker was considered a pillar of the community: today they are largely despised for transgressions against humanity.
Reprobate sociopaths or worse today, and everyone knows it.
Kwak, how pathetic can you get.
I rely heavily on data coming out of statistical organizations and can make or lose money based on my interpretation of the data – you do not need to convince me that the data is very important.
However, your underhanded cheap shot at Paul Ryan is childish. Your comments reek of the classic deep rooted partisan beliefs that are unhealthy for the progress of this country.
NASS is a classic example of government waste – my taxes go towards pointless, uselss surveys like:
– Distiller Co-Products for Feed Survey
– Monthly Potato Stocks Report
– Annual Mink Report !!!
– Monthly Fruit and Vegetable in-season forecast and estimates
– Rice Stocks reports. Five times a year!!!
– Annual Bee and Honey Report
* We need potato stocks every quarter. Nobody looks at the monthly data
* Rice stock reports are meaningless in June and September. We only need Jan, March and August
My farmer clients in Iowa pay me enough to put on derivatives to hedge their crop. They can easily pay for the Annual Bee and Honey Report.
Once again, simply pathetic. You are obviously not checking facts. Just spewing out personal opinion without regard for the underlying truth.
@woop!
“Reprobate sociopaths or worse today, and everyone knows it.” Ha Ha Ha…….sorry you lost a ton of money on speculating on tulips (houses)….time to take responsibility for your actions……nobody is buying your story anymore.
Desi, you couldn’t be more incorrect. If your inaccuracies extend to your professional life, I would suggest your days at the firm are limited.
Besides, Desi, your shilling on this board has grown effete with time, and your pronouncements predictably dour and hateful.
@woop!
Once again, Ha Ha Ha.
i find your comments about bankers extremely discriminatory and hateful. What can i do? Nothing. What can you do? Nothing.
And Annie can do less than nothing, which in fact becomes a negative, or today’s negative rates. It is clear that she has no idea what could be lurking in Ryan’s head, and she’s prolly afraid of the American dollar too.
Desi, this post is about FACT. If you believe my thinking about bankers is somehow isolated, unique, or not factually driven, then I suggest taking off your corporate blinders, and forget where your bonus originates, and try better discernment from the margin.
Otherwise, your automaton-like-subservience will forever warp your worldview, and not for the better.
I don’ think you are capable of this, however, judging from all deep antipathies expressed here against the blog owners, and some commenters. It is an immature expression of a mind not actualized.
Who pays for facts is the topic for discussion. I don’t know who paid for the Frontline documentary series, but after watching that 4 part series, it seems to me that the existence of the tulip was not the problem. Indeed, Desi has a major problem with a tulip existing in the first place, but that’s just not a normal response to reality – so who cares about her issues with tulips….
Anyway, the problem, according to the documentary, was 20 year olds at a drunken pool party in Florida in the 1990s (which means they are in the 40-50 year old range TODAY) created a role for derivatives that was never meant to exist other than as a game and over time we have many names for their games like “going naked” and “rip their face off”…
But this is all getting retarded, in the final analysis – this avoidance of fact finding and a desire to FIX THE PROBLEM. Going on and on and on with perfidy and prevarication when it ALWAYS leads back to the same thing – the dark derivatives market. How can you expect people to accept an economy and a *government* where the individual is skinned alive because all their financial transactions are an OPEN STORY for PREDATORS to access, while their made up bs derivatives market remains FACT-less to absolutely everyone – INCLUDING them!
This was an EXTREME version of massive grand larceny. There are and will be consequences – RISK that no one will be able to defend against. Go figure….
And when this prevails: “RISK that no one will be able to defend against….”
Then what’s left, other than chaos and the silent hand of theft digging deeper in satisfaction of a criminal-lust made of greed, envy, power, and an unquenchable materialism, is the imparting of delusional cognition of GOD LIKE POWERS.
Sounds to me as though these purveyors of destruction got hold of some bad ACID along the way……hahahaha……BUMMA, as native Bostonians are apt to say.
@woop – they’re gonna get whacked :-) They never factored in the risk that that is WJWD…
We already ARE in total chaos – when you add up all the criminal schemes and scams going on at once – just in USA without foreign fingers in the pie – the only way the Federal Reserve Board can get Treasury to pay them back the interest is to have Treasury take it from Social Security and Medicare funds. SIMPLE FACTUAL explanation to the most rapid destruction – the most successful eugenics, if you will – of the *middle class*. The tax rules were rigged AGAINST the rights of those people who were stupid enough to try and make their lives less miserable through honest work.
Infrastructure will be down for the count a lot sooner than they expected – ooopsie another RISK to TARP not going to the material world’s improvement – let’s hope they all bought their Eddie Bauer mechanical crank battery to do their flash trading in the Matrix when reality shuts down (AKA *austerity*).
@Desi and @Woop — I believe what’s at issue is the level of wasteful spending at the Census.
Just curious, @Woop, what inaccuracies?
And I would point out that your undercutting of Desi’s argument on the sole basis of his character reeks of partisanship/class warfare.
@Desi — I agree the language used to describe Ryan also reeks of partisanship.
However, complaining that your tax dollars are wasted on those half a dozen pointless surveys is just blowing off steam. The census as a whole brings in less than a tenth of a percent of annual expenditures. And the point, Desi, you made about your farmer-clients being able to afford their own statistics is–surprising for a finance guy–missing a major role of government statistic-gathering. Isn’t it the market more efficient if the government gathers the info and makes it freely available to everyone than if each individual company had to gather their own statistics?
You must be new to this board. Slinging personal invective is the metier of Desi, so I am somewhat surprised an argument about partisanship/class warfare is mentioned in the present context.
Desi can say what she wants here, but in her mean-spirited resolve, some here find her remarks too biting to go unaddressed.
AS for inaccuracies, her opening remark about me being a sore market loser was GROSSLY off the mark, in fact.
Your post, however, was decent and appreciated.
http://dealbook.nytimes.com/2012/05/10/jpmorgan-discloses-significant-losses-in-trading-group/?hp
More losses in the DERIVATIVES MARKET per Dimon today, a small part of the BLACK HOLE.
Who pays for this fact?
I normally don’t come to rescue of ordinary folks, but in this case I will make an exception. I got some interesting news that in a future life desi dies at a very early age, leaving behind 2 teenage daughters for a husband to raise. A person who loses a mother is said to become an orphan at that time and this case would be no exception. So the well aged desi gets rather confused with space thoughts coming and going from all directions and must lash out at her intellectual like minded companions from time to time when her banking industry gets a fat lip or loses a battle. Its no big deal folks, were just waitin for the over population to meet its maker and on with the next chapter. Move along people, there is nothing to see here.
http://www.msnbc.msn.com/id/31510813/#47388015
It was FRAUD.
There’s proof of who and how they planned all this on certain website blogs that were set up to be a discussion about a book that very very few people know about – a perfect place – for chosen ones only…
but it’s just so whacky of a story that I could never figure out a way how to present this to any *authority* while it was happening, especially because this is so inside the insider crowd, well, it would have been treated just like the info that came to the FBI from the agent about people training in Arizona to just fly a plane once in the air – “…we don’t need to know how to take off or land..” – it would have been dismissed by the TOP DOG plant as not important, because it really WAS important preventative info…
See, making no sense already and looking crazy :-))
So bottom line, yes, it was SADISTIC fraud. The biggest heist in history, but the new global economy has been successfully re-configured to support perpetual war in the Middle East – the one place on earth where profit for the insiders is 100% risk-free – peace will never cut into their business in that geographical zone…
http://www.huffingtonpost.com/2012/05/11/robert-groves-census-bureau-american-community-survey_n_1510583.html?ref=politics